Epic Games is going to war with Apple over Fortnite
Epic Games isn’t afraid of getting in a fight. Since its founding, the Cary, North Carolina-based software developer has been used to taking on the big boys and winning.
The company got its start taking on early big players in the PC gaming market, such as Apogee Software and id Software. With the latter, it had a years-long battle over game engine technology, a battle that Epic eventually won—its Unreal Engine not only powers games these days but is even used in Hollywood, most famously rendering 3D sets for Disney’s The Mandalorian.
Not content with just doing games and game engine technology, Epic next set its sights on Valve and its games distribution platform Steam. In December of 2018, Epic launched the Epic Games Store (EGS), its own rival service to Valve’s ubiquitous platform.
While the EGS’s launch was rocky at first, the service eventually found itself a decent-sized user-base, thanks in part to Epic’s enticing game developers to jump ship with development funds and, more importantly, a smaller cut of their sales compared to Steam.
The other weapon in Epic’s Arsenal during this time was its mega-hit battle royale shooter Fortnite. Fortnite currently has over 350 million users, with those who play the game on PC having to use the EGS—if players wanted to play Epic’s game, they had to use its service.
Now, it looks like Epic is planning to use Fortnite to wage yet another war, this time against Apple.
Recently, Epic allowed players on the mobile (iOS and Android) version of Fortnite to buy V-Bucks, the game’s in-game currency, directly from them. This, however, went against the guidelines of both the Apple App Store and Google’s Play Store, which require all apps going through them to use their built-in payment services.
In response, both Apple and Google removed Fortnite from their respective stores—though the game can still be sideloaded on Android. (Read: Fortnite removed from Apple App Store and Google Play Store)
However, Epic was already prepared. Following the game’s removal, Epic filed lawsuits against both Apple and Google.
Of these, however, it’s the Apple lawsuit that looks to have wider consequences, not just for the company, but for antitrust regulators as well.
Unlike Google’s Android, which allows apps to be sideloaded—Fortnite for Android can still be installed from either Epic’s store or Samsung’s store for those devices—iOS is a walled garden where everything has to go through the App Store.
It’s for this reason why Fortnite will also no longer be updated for iOS but will still see updates on Android.
The looming battle looks to be Epic’s biggest yet. The company is going where even bigger players have dared not tread. Microsoft won’t put Project xCloud on iOS, Google’s Stadia app won’t let iPhone users play games and even Facebook axed the ability to play games on its Facebook Gaming App on iOS.
At stake in this battle is Apple’s ability to earn money from in-app purchases from apps on its platform, without its users having alternatives. Apple currently takes a 30 percent cut of all sales on its store (Google also takes a similar cut from Play Store purchases).
This stance has long been a point of contention for many developers who argue that Apple’s fee is too burdensome and that it gives Apple’s own products an advantage by letting the company sell its own stuff with a higher profit margin.
These practices have already put Apple under the crosshairs of U.S. lawmakers. Last month, the company’s policies came under fire at a congressional hearing where CEO Tim Cook was invited to testify.
Epic’s own CEO, Tim Sweeney, has himself been pretty vocal about his disdain for Apple’s policies. Over the past couple of weeks, he’s been putting Apple on blast in a series of tweets where he explained how the latter had been using an “intentional anti-competitive strategy” for years now.
“It pains me to complain about Apple in this way,” Sweeney wrote. “Apple is one of the greatest companies that has ever existed, perhaps the greatest. But they’re fundamentally wrong in blocking competition and choice on devices they make, and that holds up entire fields of technological progress.”
For its part, Apple is taking Epic’s challenge head-on—likely the only move it could make if it wanted to keep its policies and not let Epic have its way. In its response to the suit, Apple claimed that it was only pushing for a level playing field on its service.
“Epic agreed to the App Store terms and guidelines freely, and we’re glad they’ve built such a successful business on the App Store,” read a statement from Apple PR to Recode. “The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users.”
The question now is whether Epic can sustain this battle. The company certainly has the money to do it, having earned around $730 million last year on revenue of $4.7 billion. In addition, both Chinese tech giant Tencent and gaming leader Sony own stakes in Epic.
The loss of Apple customers, however, could still cost Epic some money. According to SensorTower, Apple customers have spent $1.2 billion on Fortnite since March of 2018. This would translate to $840 million after Apple’s 30 percent cut.
That said, Epic doesn’t seem to be afraid. “We’re fighting for open platforms and policy changes equally benefiting all developers,” said Sweeney in another tweet.
“And it’ll be a hell of a fight!”
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